The Telecommunications Industry Ombudsman (TIO) will have much stronger powers to punish telcos for not complying with the TIO scheme, under proposed changes by the government.
An investigation into the ombudsman's role was commissioned by the government in March last year, following record complaints about the telecommunications industry. The resulting report , which was released by Communications Minister Stephen Conroy on Friday (PDF), calls for seven sweeping changes to the office.
The report noted that while the TIO was effective in dealing with individual complaints from customers against telcos, it did not lead to changes in the way the industry manages complaints from customers.
"Service providers can, and should, be resolving many complaints without the TIO's involvement, but appear to lack the incentives to do so," the report stated.
To encourage telcos to resolve complaints, the report proposes that telcos be required to register with the Australian Communications and Media Authority (ACMA). This would provide the ACMA with the ability to penalise telcos that are operating without being registered for the TIO scheme.
The report also suggests publicly naming telcos that are non-compliant with the TIO scheme, as a method of motivating telcos to resolve customer disputes before they reach the TIO.
"Reputational risk to service providers, resulting from public acknowledgement that they have failed to resolve complaints, is typically a far greater incentive for compliance than monetary penalties," the report stated. "Most industry insiders are already in a position to know which TIO members are subject to a final determination, direction and recommendation, or are generally not compliant with the TIO scheme."
The telcos, in their submissions, objected to naming and shaming, with Primus saying that the decision to name a company would have to be subject to independent review, before potentially damaging the reputation of that business.
The report stated that at a minimum, the TIO should publicly report on "rogue providers" that have failed to comply with either binding or non-binding recommendations made by the TIO.
The TIO has a role in identifying what it terms as "systemic issues" in the industry, so that it can then develop mechanisms to resolve them. The report noted that there have been criticisms that the definition of a systemic issue is too narrow; a high threshold of the issue has to arise from a customer complaint, and impact a specific number of end users.
The report recommends redefining "systemic issues" to allow the TIO to investigate issues without a complaint from customers, and requiring the ombudsman to report to the regulators, members and the public about the number and types of systemic issues it has encountered.
An issue identified by the Communications Alliance is that the TIO currently reports raw customer numbers when outlining the numbers of complaints. For larger telecommunications companies, like Telstra and Optus, this means that they always appear to have more complaints than their smaller rivals. The report recommends adjusting the metrics to a proportional complaint statistic, where complaints would be put into the context of the total number of customers that a specific company has.
To cover its costs, the TIO currently imposes a fee on telecommunications companies for each level of complaint that it handles, ranging from $32 up to $2400, excluding operating and capex fees. The report didn't state that this should be increased, as it would provide little incentive for providers to improve complaints handling. Instead, the TIO should take a more hands-on role with the operators, providing training and guidance on how best to deal with complaints, according to the report.
The report recommended that to make the board of the TIO equally divided between consumers and telcos, it should be equally represented by the industry and consumers and chaired by a person independent of both groups. It was also recommended that the TIO publish the details of its board meetings on its website.
As the telecommunications industry begins to expand into providing content, the report said that the TIO should also clarify its jurisdiction with the public, and make it clear that the TIO does not oversee IPTV or subscription TV services.
In a statement on Friday, Conroy welcomed the recommendations of the report.
"These recommendations will make the TIO more effective, more transparent and more in touch with the expectations of the Australian people," he said.